Lockup Agreement

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Lockup Agreement

Where the purchaser of securities agrees not to sell the securities for a certain period of time (the lockup time).
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Lockup Agreement

1. See: Crown jewel lockup agreement.

2. During an IPO, a contract prohibiting executives, underwriters, and/or venture capitalists from selling their shares in the company for a certain period of time. The period of time is usually about six months, but may be longer or shorter. A lockup agreement exists to reduce the pressure for volatility as the company goes through its first few months of public trade.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

lockup agreement

A contractual offer of valuable assets or stock made by a takeover target to the suitor deemed most acceptable to management. A lockup agreement tends to discourage unwanted suitors, but it may penalize the target firm's stockholders because it eliminates counteroffers. Also called crown jewel lockup agreement.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
A lock-up agreement in the share acquisition context refers to a contract between a prospective takeover bidder and shareholders of the target corporation, pursuant to which the bidder undertakes to launch a takeover bid at a price no lower than an amount specified in the contract.
Also, Sphere 3D and Imation have entered into a lock-up agreement, dated 10 August 2015, which imposes limitations on the transfer and sale of the common shares issued to Imation at closing and requires that Imation vote its shares in accordance with any recommendation of Sphere 3D's board of directors for a designated period of time.
Florida-based xG Technology Inc (LSE: XGT), developer of a low-cost, mobile VoIP and data communications system, announced today that the lock-up agreement dated 23 April 2009, relating to shares in which a company director is interested, has been extended for a further six months.
Voip-Pal.com Inc (OTC Pink:VPLM) announced on Wednesday the entering into a voluntary lock-up agreement with its largest shareholder, Emil Malak.
M2 EQUITYBITES-September 4, 2012-Turquoise Hill Resources and Chalco's SouthGobi Lock-Up agreement set to expire due to approval timeframe(C)2012 M2 COMMUNICATIONS http://www.m2.com
Further, Cliffs has a lock-up agreement with Spider's largest shareholder, MineralFields Group, under which it has agreed to tender its Spider shares, which represent 10.8% of the outstanding shares of Spider on a fully-diluted basis.
Also, the company said that it, its directors and officers remain subject to lockups and transfer restrictions regarding its common stock under applicable lock-up agreements and the shares of its common stock that were outstanding before its IPO remain subject to lock-ups and transfer restrictions under its charter.
In a regulatory filing, Lyft said on Wednesday that pursuant to the lock-up agreements with the underwriters, if (i) at least 120 days have elapsed since March 28, 2019, (ii) the company has publicly released earnings results for the quarterly period during which the IPO occurred and (iii) such lock-up period is scheduled to end during or within five trading days prior to a broadly applicable and regularly scheduled period during which trading in the company's securities would not be permitted under its insider trading policy, such lock-up period will end ten trading days prior to the commencement of such blackout period.
LONDON: British investors have called upon investment banks to stick closer to lock-up agreements on sales of company shares after a major transaction, saying it would ensure more stable markets.